FINTRAC Interpretation Notice No. 2
July 8, 2008
Accountants - Giving Instructions Versus Providing Advice
The purpose of this notice is to clarify the difference between providing advice to a client as opposed to giving instructions on behalf of a client, within the context of accountants' activities.
If you are an accountant or an accounting firm, you are subject to certain requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations. This applies only when you engage in any of the following activities on behalf of any individual or entity (other than your employer), or give instructions in respect of those activities on behalf of any individual or entity (other than your employer):
- receiving or paying funds (for example you receive funds in trust to pay bills on behalf of your client);
- purchasing or selling securities, real estate property, business assets or entities; or
- transferring funds or securities by any means.
You are subject to the requirements when you engage in those activities, regardless of whether or not you receive any fees or have a formal letter of engagement to do so. In other words, even if you carry out these activities on a volunteer basis, you are subject to the PCMLTFA's requirements. Effective June 23, 2008, the receipt of professional fees themselves for the above‑mentioned activities does not trigger your requirements under the PCMLTFA.
Note: Activities of accountants or accounting firms other than those listed above, such as audit, review or compilation engagements carried out according to the recommendations in the Canadian Institute of Chartered Accountants (CICA) Handbook, are not subject to the PCMLTFA or its regulations.
Giving instructions versus providing advice
When you give instructions for any of the above‑mentioned activities, it means that you actually direct the movement of funds. By contrast, when you provide advice to your clients, it means that you make recommendations or suggestions to them. Providing advice is not considered to be giving instructions.
Example of giving instructions: "Based on my client's instructions,
I request that you transfer $15,000 from my client's account, account number XXX, to account number YYY at Bank X in Country Z."
Example of providing advice: "For tax purposes, we recommend that you transfer your money into a certain investment vehicle."
For more information about the requirements applicable to accountants and accounting firms, see the series of guidelines prepared by FINTRAC.
- Date Modified: